How Data Tokenization Plays an Effective Role in Data Security

How Data Tokenization Plays an Effective Role in Data Security

As organizations continue to gather and store large amounts of data, the risk of data breaches and cyber-attacks increases. It is therefore crucial for organizations to take proactive measures to safeguard their sensitive user data. In addition to external threats, organizations must also comply with data protection regulations such as GDPR and CCPA, which mandate the implementation of technical and organizational measures to protect personal data.

A robust data privacy and security strategy is essential for organizations to protect their confidential information and maintain customer trust. By utilizing technologies like data tokenization, enterprises can benefit from improved security and compliance measures. Data tokenization involves substituting sensitive data with non-sensitive data, making it more challenging for cybercriminals to access and use sensitive information.

This article will discuss the benefits of data tokenization and how Protecto's Privacy Vault can help organizations protect their sensitive data and mitigate privacy risks, and implement a comprehensive data protection strategy that aligns with industry standards and regulations.

What is Data Tokenization?

Tokenization is a contemporary data security strategy that enables enterprises to operate efficiently and securely while adhering to data regulations. It has gained popularity among businesses of various sizes as a means of enhancing the security of personally identifiable information (PII) while reducing the costs and complexities associated with industry standards and government regulations.

The process of tokenization involves substituting sensitive data with unique tokens that maintain all of the data's essential information while ensuring its security. In essence, tokenization replaces the original data by generating completely random alphanumeric characters. This approach allows organizations to safeguard sensitive data and minimize the risk of data breaches, while still retaining the necessary data for operational purposes.

Interesting read: Everything You Need to Know About Data Privacy Vault

Need for data tokenization

The need for data tokenization is becoming increasingly important in today's world where data privacy concerns have come to the fore as one of the highest priorities for every organization. A recent IBM state of data security report published that data privacy and data security are among the top 3 priorities for the data teams. While a typical data privacy vault provides a secure environment for organizations to store, manage, and share sensitive user data, tokenization offers an advanced data masking technique that further enhances data security and makes the data usable for analytics and machine learning.

At its essence, Tokenization involves replacing or masking sensitive data with unique identification data while preserving all essential information about the data. The unique replacement data, also known as a token, is equivalent to the original data. Also, tokenization is a non-destructive method of data masking which means that the original data can be retrieved using the unique replacement data or token.

By utilizing advanced security measures like two-factor authentication, secure cloud infrastructure, protection against hacking and breaches, data encryption, and regular security audits and updates, a data privacy vault guarantees the safety and security of sensitive user data. However, tokenization offers an extra layer of protection by replacing sensitive data with tokens, making it difficult for cybercriminals to compromise the sensitive information.

Protecto’s Intelligent Tokenization 

Protecto offers smart scanning of PII data and tokenization capabilities on a single platform.  Protecto’s “Intelligent  Tokenization” platform selectively masks personal data, while retaining and presenting the rest of the data in its original form. By doing this, users can still interact with the data but are unable to see ANY sensitive information. This ensures the efficient sharing of data without concerns about security OR compliance risks. Moreover, Protecto offers users the flexibility to either retain the format which lends the data to be usable for analytics and machine learning.

Components of Protecto Privacy Vault

Traditional masking and encryption tools make the data completely unusable for processing through AI/ML models – so it is impossible to get any insights on sensitive data. On the other hand, Protecto's consistent use of identifiers for personal data across all data sources allows your organization to seamlessly merge and analyze data through Analytics and ML models. As a result, organizations can make smart decisions about their enterprise data without sacrificing data privacy and security.  

Benefits of data tokenization

Data tokenization offers several benefits to organizations, including enhanced data security, reduced risk of data breaches, and improved compliance with data protection regulations. Here are some benefits:

  1. Enhanced data security:
    Tokenization offers a robust and secure method of data masking that can protect sensitive information against cyber threats. The process of replacing sensitive data with tokens ensures that even if a hacker gains unauthorized access to the system, they will not be able to access the original data.
  2. Minimize privacy footprint within your enterprise data stores:
    Tokenization serves as a robust data security approach implemented within enterprise storage layers, aimed at minimizing privacy data footprints. The proactive technique provides a protective shield for critical data, including customer payment details, personal information, and authentication credentials, effectively mitigating potential breaches. Tokenization acts as an additional layer of defense, working in tandem with encryption and access controls, resulting in a comprehensive and formidable protection system for sensitive information within the enterprise ecosystem.
  3. Reduced impact of data breaches:
    Tokenization reduces the impact of data breaches as the sensitive data is no longer stored in plaintext format. In the event of a security breach, the hackers will only be able to access tokens instead of sensitive data, rendering the stolen data useless.
  4. Ability to run advanced AI and analytics with masked data:
    One of the most important benefits of Tokenization over other approaches such as Encryption is that once the data is tokenized, it is still useful for running analytics and intelligence. Data scientists can run tools on tokenized data to analyze patterns associated with it without seeing the underlying, sensitive data like personally identifiable information (PII).
  5. Improved compliance with data protection regulations:
    Tokenization helps organizations comply with data protection regulations such as GDPR and CCPA. These regulations require organizations to take appropriate measures to protect personal data, and tokenization provides a reliable and effective solution to achieve compliance.
  6. Cost-effective solution for data protection needs:
    Tokenization is a cost-effective solution for organizations as it eliminates the need for expensive hardware and software required for other data security measures. Also, by reducing the amount of sensitive data that needs to be secured, tokenization can also help organizations to save money on security measures such as firewalls, intrusion detection systems, and other security technologies.
  7. Improved data processing:
    Tokenization enables organizations to process data more efficiently as tokens are smaller in size compared to the original data, making it easier to transfer and store large amounts of data.

Also read: What is Data Sprawl and how to prevent them


Protecto's Data Privacy Vault provides a comprehensive solution for companies to securely store and manage their sensitive data. The turnkey APIs offered by Protecto allows developers to easily collect, tokenize, and re-identify PII on-demand. With the Protecto Data Privacy Vault, companies can effectively protect their sensitive data and mitigate the risks associated with data breaches and cyber-attacks.

Protecto's Data Privacy Vault ensures that companies can store sensitive data in-house while sharing tokenized data with their stakeholders. This means that companies can avoid the security risks associated with managing their own data infrastructure, while still maintaining complete control over their data. Additionally, the Privacy Vault comes with pre-built connectors to popular data stores and enterprise applications, making it easy for companies to connect their existing systems to Protecto and start mitigating privacy risks right away.

Getting started with Protecto is quick and easy. Companies can choose to deploy Protecto as a SaaS solution with no code setup or install it on-premises via containers. This flexibility allows companies to choose the deployment option that works best for their needs. Whether deploying as SaaS or on-premises, Protecto offers a user-friendly interface that allows companies to quickly connect their data store or application and start securing their sensitive data within days.

To experience Protecto's Data Privacy Vault, companies can sign up for a free trial or request a demo to learn more about how Protecto can help mitigate privacy risks for their organization.

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